WSJ Says Scaled-Down Health Bill Is Democrats' Less-Risky Path

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• CAPITAL JOURNAL
• AUGUST 21, 2009

Scaled-Down Health Bill Is Democrats' Less-Risky Path

The nation's health-care debate -- now grown epic in scope and historic in consequence -- is pushing the Obama administration and fellow Democrats toward a moment of reckoning, when they will have to choose among three equally perilous paths emerging from the rhetorical fog.

This moment of reckoning isn't going to arrive this month, much as all the shouting at town-hall meetings is affecting the debate. Instead, it's likely to arrive in September, when Congress returns to Washington and Democratic leaders take stock.

When that moment comes, the only thing that appears certain is that the plan originally envisioned by House Democrats won't pass Congress and be signed into law. That particular vessel -- with a trillion-dollar price tag, a government-run public insurance option and a hefty surtax on the rich -- has taken on too much water during attacks from the right.

Instead, President Barack Obama and leaders on Capitol Hill will face a tough tactical choice among lesser options. But while the options may have shrunk in size, the consequences actually have grown. A large chunk of the American economy, the health choices made by every business and citizen, the political tenor of the next few years, and the course of the Obama presidency all will be greatly affected.

In oversimplified form, Mr. Obama now will have to choose among three options: small, medium and large.

The small option would be a stripped-down version of health reform, one that is significantly narrower in scope than originally envisioned but that would attract the votes of skittish conservative Democrats and at least a few Republicans. This approach would jettison the idea of a "public option," or a government-run health-insurance plan to compete with private insurers; it would have a smaller price tag, meaning less in government subsidies to help Americans buy insurance; and it wouldn't be financed with a single large tax increase on wealthier Americans but rather a smattering of Medicare cuts and smaller taxes.

This approach, in fact, would amount largely to a reform of the existing health-insurance system. Democrats could portray it as a good start, setting off a years-long effort to slowly reshape the American health system. The laboratory for concocting such a bill is the Senate Finance Committee, the key members of which were to talk by phone Thursday.

The central question is whether any Republicans are still willing to vote yes on anything this year; Democrats are growing increasingly skeptical. The key player to watch is Iowa Sen. Charles Grassley, the Finance panel's top Republican, who has been all over the lot in recent comments.

The midsize option would be a more expansive bill, designed to pass with only Democratic votes. The problem here is that even some moderate Democrats -- the so-called Blue Dogs in the House and senators from some conservative states -- might fall off if the bill is too expansive.

So even the midsize option likely wouldn't offer a government-run insurance option but rather nonprofit insurance "cooperatives." It would offer more subsidies to help Americans buy coverage than the small option, but, to keep the price tag down, wouldn't reach "universal" coverage. It might include a mandate that businesses provide health insurance to employees, in return for some government help.

But the only way to get even a midsize bill through the Senate might be to use budget rules -- called reconciliation -- allowing it to pass with 50 votes rather than the 60 needed to break a potential Republican filibuster. In theory Democrats have precisely 60 votes to stop a filibuster, if all go along. But Democratic aides note that they can count on only 58 votes, as Sens. Edward Kennedy and Robert Byrd are in such bad health that there is no guarantee they can make it to the Senate floor on any given day.

Right now, most Democrats are hovering somewhere between the small and midsize options -- hence the talk that arose this week about breaking the package into two pieces. One would be the small piece heavy on insurance overhauls, which might get some Republican support. The other piece -- designed to pass with only Democratic votes -- would establish either a public option or a new nonprofit insurance cooperative to compete with private insurers and include subsidies for expanding coverage.

There is a third option looming out there -- the large option -- advanced by Democratic strategist James Carville. Mr. Carville has suggested bringing to the floor of Congress a full-blown health-overhaul bill, with all the bells and whistles many Democrats wished for originally, and challenging Republicans to defeat it in the House and filibuster it in the Senate.

The point of this option wouldn't be to pass legislation so much as to force Republicans to kill it, and then to portray them in next year's congressional campaign as the status quo party opposing change.

It would be a high-risk strategy, to say the least, and it isn't yet attracting many Democratic adherents in Congress or the White House.

"You have to decide whether you want a bill, or you want an issue," said one Senate Democrat. Right now, most Democrats still yearn for a bill and something they can call success -- which is why the small and midsize options are their most likely choices.

Write to Gerald F. Seib at jerry.seib@wsj.com